Pepsi, Coca-Cola, McDonald’s, Starbucks, Kraft Heinz, Kellogg’s latest businesses to join exodus from Russia

Dwindling group of companies are still trading after Putin’s invasion of Ukraine

PepsiCo has suspended all drinks sales in Russia following Vladimir Putin’s invasion of Ukraine, but says it will continue to sell essential products such as baby milk and foods.

The company had been among a group of major Western firms that continued to operate in Russia following the Kremlin’s unprovoked assault on Ukraine.

Those firms included the likes of Kraft Heinz, Kellogg’s, Coca-Cola, Starbucks and McDonald’s in suspending their operations in Russia.

“Given the horrific events occurring in Ukraine we are announcing the suspension of the sale of Pepsi-Cola, and our global beverage brands in Russia, including 7Up and Mirinda. We will also be suspending capital investments and all advertising and promotional activities in Russia,” PepsiCo CEO Ramon Laguarta said in a letter to employees on Tuesday.

But the executive said that not all of the company’s product sales would be stopped.

“As a food and beverage company, now more than ever we must stay true to the humanitarian aspect of our business. That means we have a responsibility to continue to offer our other products in Russia, including daily essentials such as milk and other dairy offerings, baby formula and baby food,” he added.

“By continuing to operate, we will also continue to support the livelihoods of our 20,000 Russian associates and the 40,000 Russian agricultural workers in our supply chain as they face significant challenges and uncertainty ahead.”

Meanwhile, Coca Cola and Starbucks also joined the ranks of major US companies suspending their operations in Russia, both firms announced on Tuesday.

“We condemn the unprovoked, unjust and horrific attacks on Ukraine by Russia, and our hearts go out to all those affected,” Starbucks CEO Kevin Johnson wrote in a letter on Tuesday, condemning the Russia war effort.

The coffee chain has about 130 outlets across Russia and Ukraine, employing nearly 2,000 people, but the countries only account for less than one per cent of Starbucks’s global revenue.

“Our hearts are with the people who are enduring unconscionable effects from these tragic events in Ukraine,” added Coca-Cola in a statement on Tuesday. “We will continue to monitor and assess the situation as circumstances evolve.”

Cereal manufacturer Kellogg’s also said that it had taken action as well.

“We have already suspended all shipments and investments into Russia,” said company spokesman Kris Bahner.

Kraft Heinz also confirmed that it had “suspended all new investments” in Russia.

“While we continue to closely assess the humanitarian crisis in Ukraine, Kraft Heinz has suspended all new investments in Russia, and has also suspended all exports of Kraft Heinz products to Russia as well as imports of products from Russia,” the company said in a statement.

“Additionally, we have donated $1 million USD to the Red Cross to address the Humanitarian Crisis and we’ve implemented a $2-to-$1 company match for employees who wish to personally donate to the Red Cross.

“We have also made several in-kind donations, including our Pudliszki brand in Poland donating food products to the local Red Cross, helping feed refugees arriving from Ukraine.”

British consumer goods company Unilever also said that it had suspended “all imports and exports of our products into and out of Russia, and we will stop all media and advertising spend”.

“We will not invest any further capital into the country nor will we profit from our presence in Russia. We will continue to supply our everyday essential food and hygiene products made in Russia to people in the country. We will keep this under close review,” CEO Alan Jope said in a statement.

Yale University professor Jeffrey Sonnenfeld and his research team at the Yale Chief Executive Leadership Institute have been publishing a list of major companies who have stopped doing business in Russia, and the businesses that have so far remained.

He said that the withdrawal of Coca-Cola, Pepsi and McDonald’s marked “the end” of companies doing business in Russia.

“It’s more than a gathering storm, it became a stampede today,” he told The Independent.

“Almost nobody wants to be on the wrong side of history, but you do still see some honorable companies that are on the wrong side, they are not doing it out of greed, it is a mindset that is stuck in a cultural time-warp, they are living in an era of Perestroika, they were great commercial bridges in that time,” he said.

“This is the end, the people there are hanging on for life, they cannot survive, it is a taint on the CVs, resumes and careers of the executives and board members of the companies that are staying there,” he added.

“They are hoping for a win-win solution but no, that is not what we are doing here, we are trying to tank the economy we are not trying to provide a smooth landing.”

The Independent has reached out to all the companies that remain on the Yale list as still doing business in Russia, including Arconic, Bridgestone, Burge, Caterpillar, Coty, Citi, Deere, Ferragamo, Herbalife, Hilton, Honeywell, Hyatt, Intercontinental Hotels, Kimberly-Clark, Marriott, Mars, Nestle, Otis, Papa John’s, Philip Morris, Pirelli, and Timken.

Otis, which manufactures elevators and escalators, said in a statement, “We are monitoring developments carefully and will continue to adjust our operations and procedures in compliance with applicable laws and in order to continue to best serve all of our stakeholders in this challenging context.”